Type 2 diabetes mellitus is one of the most prevalent metabolic diseases that is characterized by hyperinsulinemia, insulin resistance, and defect(s) in islet secretory function. Insulin[unreadable]s action is mediated by a complex network of signaling events that are initiated upon insulin binding to the insulin receptor (IR). The precise mechanism underlying insulin resistance remains incompletely understood but it is thought that tyrosine phosphorylation plays an important role. Tyrosine phosphorylation is tightly controlled by the opposing actions of protein-tyrosine kinases and protein-tyrosine phosphatases (PTPs). Protein-tyrosine phophatase 1B (PTP1B) has been implicated as a major physiological regulator of glucose homeostasis and adiposity. Recent insights into the physiological role of PTP1B, using tissue-specific deletion approach, revealed a diverse and complex function in various insulin-responsive tissues. However, the role of PTP1B in regulating pancreatic function remains largely unexplored. Insulin signaling plays an important role in &#61538;-cell function and mass, thus it is important to understand the physiological role of PTP1B, a major regulator of insulin signaling, in the endocrine pancreas. We previously demonstrated a role for PTP1B in regulating &#61538;-cell homeostasis and showed that PTP1B deficiency can partially compensate for &#61538;-cell failure in insulin receptor substrate 2 (IRS2) knockout (KO) mice. In preliminary studies we show that (i) PTP1B is expressed in primary islets, (ii) is a regulator of &#61538;-cell function, insulin secretion and systemic glucose homeostasis, and (iii) identified putative substrates that are involved in &#61538;cell-cell communication. These preliminary findings are the first to directly implicate PTP1B in the regulation of islet function in vivo. To fully assess the physiological role of PTP1B in pancreatic islets, we will employ three complimentary approaches. We will generate pancreas-specific PTP1B knockout (panc- PTP1B KO) mice to study the direct consequences of PTP1B loss in the pancreas in vivo. Equally important are the dissection of the molecular mechanisms mediating PTP1B[unreadable]s function, and characterization of PTP1B substrates in &#61538;-cells. The broad goals of this proposal are to investigate the physiological role of PTP1B in pancreas endocrine function with the long-term aim of generating therapies for the treatment of diabetes. It is envisioned that the successful completion of these studies will lead to major insights into the regulation of pancreatic &#61538;-cell signaling, and aid in identifying targets for therapeutic intervention for both type 1 and 2 diabetes.